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easy money is ending and i don't think the markets have fully discounted that i thinkthefedcansurprise on the upside and yields can surprise on the upside >> so, when we were talking in the last couple months that the curve is flattening. the two-year moved a ton but the 30-year did not. what do you see with the hikes coming out >> it's more for the fed to tighten. and it's looking for a little steepening in the short term and ultimately going back to flattening because the ten-year rarely goes above where the fed fund terminal rate is >> where you think it is now >> 2.75. we're probably getting close to that i don't think we can stay above that unless the expectation that the fed is going a lot higher? >> would you agree with that >> yeah. historically, ten-year was nominal gdp. imagine if that happens. >> that hasn't happened in a long time. gdp, 4.5%? >> yes, are we built in a economy that's so particular to lower interest rates is how sensitive are we going to to be to these changes in interest rates? >> probably more so than people believe right now. >> guys, thank you ka

easy money is ending and i don't think the markets have fully discounted that i think the fed can surprise on the upside and yields can surprise on the upside >> so, when we were talking in the last couple months that the curve is flattening. the two-year moved a ton but the 30-year did not. what do you see with the hikes coming out >> it's more for the fed to tighten. and it's looking for a little steepening in the short term and ultimately going back to flattening because the...

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declines in the markets even though we did see some gains in equities afterthefed'sdecisionand hearing some of those comments we'll continue to watch this the s&p is now in danger of closing negative for the month of september if we continue on these trends dow has been down for three sessions in a row but still on a positive track for september >>> overnight in asia, you will see the nikkei was down by a percent. hang seng off by a third of a percentage point in europe, where we are seeing some trading in the liearly hou, the ftse is flat most other markets are down. dax is down along with cac and check out treasury yields, we saw a pullback in some of the yields looks like the ten-year note is still above 3%, but trading at 3.044%. >>> we have a developing story in the energy market reuters is reporting that saudi arabia will slowly add oil saying they may have to limit output next year to balance global supply and demand as the u.s. pumping more crude. wti at 72.33 saudi arabia has been iunder pressure from pump to halt the recent climb in oil prices >> hour and a half, watc

declines in the markets even though we did see some gains in equities after the fed's decision and hearing some of those comments we'll continue to watch this the s&p is now in danger of closing negative for the month of september if we continue on these trends dow has been down for three sessions in a row but still on a positive track for september >>> overnight in asia, you will see the nikkei was down by a percent. hang seng off by a third of a percentage point in europe, where...

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going to talk about slapping tariffs on iphones, when you talk about puttingthefedfrontand center in the debate, what you can expect is that multiples will come in. that is happening this year. multiples could come in more however -- >> you don't think this is necessarily a dip? this could be the new reality. >> when you look at between now and year-end, the point is that the frustration of the bulls and bears has caused positioning to get very light, very defensive, and if you think about it, saying that you're going to go through with 25% tariffs in january sets the bar very low for progress this weekend. so the president may be doing this to deliver upside for us, you know, that increases the probability of a year-end rally. >> that's an interesting perspective. i did not think through the double secret probation aspect of it >> double secret, triple secret. a lot of back and forth going on >> ian, a lot of this is the late cycle talk. is this late cycle is this end of cycle >> we're late with a twist because we have a big fiscal boost. you look back at history you will find pa

going to talk about slapping tariffs on iphones, when you talk about putting the fed front and center in the debate, what you can expect is that multiples will come in. that is happening this year. multiples could come in more however -- >> you don't think this is necessarily a dip? this could be the new reality. >> when you look at between now and year-end, the point is that the frustration of the bulls and bears has caused positioning to get very light, very defensive, and if you...

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fedisdoing >> may not change jim's mind about where the economy is headed, will it affect equities traders? >> i think if the print is higher than expected, we see core inflation rise, it will destabilize the equity market. what has happened over the past week or so is that the bond market has begun to price the stock market's outlook the stock market has been focused on healthy mick growecoc growth, solid profit growth, the bond market is on structurally lower growth i think a hotter than expected inflation print would destable i equitie equities >> we have now seen stocks make up about half of the losses. >> yes >> that they took through that time how do you value where we stand right now an where you think prices are fair or not >> i think that prices are -- prices around the world in asset markets are elevated given where we are in the broader kochb text of the economic cycle. on a relative basis, equities are looking attractive against fixed income i think there's room for stock prices to rise the year-end targets are still viable ones as we look to the end of 2018. >> what ye

fed is doing >> may not change jim's mind about where the economy is headed, will it affect equities traders? >> i think if the print is higher than expected, we see core inflation rise, it will destabilize the equity market. what has happened over the past week or so is that the bond market has begun to price the stock market's outlook the stock market has been focused on healthy mick growecoc growth, solid profit growth, the bond market is on structurally lower growth i think a...

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grant will say unlessthefeddoesorchestrate a problem, that maybe we're looking into the abyss, someone is turning the light on maybe there is not a big mop sister there >> i read the notes a little differently. like the fed better change its course or we will hit the big monster. glass half full, glass half empty. >> more and more people are coming to powell's defense that he is just cleaning up the mess from his two predecessors. >> he will be speaking at an economics conference where he is sitting alongside bernanke and yellen >> you can make the argument that he is cleaning up the mess for qe 3 that was end of december, january 2015 now you are at 4 trillion. did you need the qe 3. i think we need to put it into perspective. you still have a vex of volatility measure that sits at 27 even after a 5% rally so i'm not sure where we are turning to a more normalized environment. i think more importantly you had portfolio managers at the end of september put it at 2900, 3.20, and make reallocations 2.70 and the s&p on the 2400 >> i think it was a little bit of both. pensions bein

grant will say unless the fed does orchestrate a problem, that maybe we're looking into the abyss, someone is turning the light on maybe there is not a big mop sister there >> i read the notes a little differently. like the fed better change its course or we will hit the big monster. glass half full, glass half empty. >> more and more people are coming to powell's defense that he is just cleaning up the mess from his two predecessors. >> he will be speaking at an economics...

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and that put pressure on yields. and we'll talk aboutthefedandits issues when we hear from a couple of fed governors later today. right now the ten-year is yields 2.86%, after all of that, just up after a week ago. >>> here's what's going on uber sell ig southeast arab business to singapore based rival grab. it's going to move the hide railing and food delivery into grab they will acquire a twrief% stake in grab and uber's ceo will join the board. it's marking uber's second exit from the highly competitive asian market you will remember that uber sold its china business to rival de this is a chip because effectively they're saying we're going to get out of these businesses we're going to focus here in the u.s. and other markets in europe >> is it a strategic focus or is it we're running out of money? >> i don't think it's we're running out of money by the way, the deal with dd turned out to be quite a remark about one in terms of economics of it. these deals might actually be good they have a focus problem the whole idea under travis is we want to own the whole world, but now

and that put pressure on yields. and we'll talk about the fed and its issues when we hear from a couple of fed governors later today. right now the ten-year is yields 2.86%, after all of that, just up after a week ago. >>> here's what's going on uber sell ig southeast arab business to singapore based rival grab. it's going to move the hide railing and food delivery into grab they will acquire a twrief% stake in grab and uber's ceo will join the board. it's marking uber's second exit...

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calendar, weekly jobless claims will be released at 8:30 a.m. eastern time randy quarlesandfedpresidentbill dudley, raphael bostic and rob kaplan all have scheduled events today quarr quarrels made comments at a speaking event in tokyo overn t overnight, but we have somebody here live. >> blooming brands, you know what that is >> blooming ononions >> a lot of casual dining f you're going to focus, what should they be known for those grease y beautiful onion rings. bloomin' brands. they have all these different things, if you want to define that company -- >> bloomin' onion. >> you had one of those things >> they're good. wouldn't have too many of them >> the big thick ones, but these are just -- any way. i'm totally distracted now let's get to our special guest, jim bullard is our guest host for the hour great to have you here the "journal," the lead, fed gives bullish signals on the economy. "a" s that the correct determination? brdz, a "b," are you more convinced as a group that the 2% inflation target is coming sooner? and this did not cause you to change the path in interest rate h

calendar, weekly jobless claims will be released at 8:30 a.m. eastern time randy quarles and fed president bill dudley, raphael bostic and rob kaplan all have scheduled events today quarr quarrels made comments at a speaking event in tokyo overn t overnight, but we have somebody here live. >> blooming brands, you know what that is >> blooming ononions >> a lot of casual dining f you're going to focus, what should they be known for those grease y beautiful onion rings....

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trigger. that's, hey, we don't know whatthefedwilldo. the bond market is not acting like that's the world we're in the two-year note wreeld ca-yeae down >> which makes you wonder is this a technical issue that we snap back from if that's the case, why are we still down >> it's a technical issue that can play out but it's a symptom of a market overvalued and overextended. you can see there's nothing fundamental to explain this. was there anything fundamental to explain the 5% upside lately? not necessarily. this is not a normal market. the vital signs of the market are out of whack when you see down 670 for the dow, then down 200. >> tell me who else is on the orient express give me a couple >> they all did it >> give me a couple of them. i want -- in this instance, for this market. give me a couple reasons beyond the good news is bad news. beyond the worries about the stimulus being too much, beyond the fact that maybe we are in an overheated economy >> i don't know that you need beyond that. you know what the term correction comes from in a market the index or a price got so far ab

trigger. that's, hey, we don't know what the fed will do. the bond market is not acting like that's the world we're in the two-year note wreeld ca-yeae down >> which makes you wonder is this a technical issue that we snap back from if that's the case, why are we still down >> it's a technical issue that can play out but it's a symptom of a market overvalued and overextended. you can see there's nothing fundamental to explain this. was there anything fundamental to explain the 5%...

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thing is it depends on how highthefedpushesthe interest rates. we're starting to see bankruptcies there's a bankruptcy index that's been increasing the last two quarters we see relief in the ten-year treasury that might have improvements in the credit cycle >> i deon't like reading about peak things, peak earnings, peak economy. when it hits a peak, is it a plateau or is there another side >> it doesn't have to be the peak but that's what people are nervous about. >> so that's the concern >> they keep looking over their shoulder, is this the end? have things peaked out i don't think that's the case. i think there's a lot of opportunity in the equities market, but it's a tougher environment than before. >> are you a kid in a candy store, too >> i may be a kid in a candy store but i'm selective in what i like >> they're all empty calories, really >> at the moment they all feel like empty calories because they go up and down >> you mean the market itself feels like a sugar high. >> yes there's been these days where you think it tastes so sugary, then you realize empty calories by the

thing is it depends on how high the fed pushes the interest rates. we're starting to see bankruptcies there's a bankruptcy index that's been increasing the last two quarters we see relief in the ten-year treasury that might have improvements in the credit cycle >> i deon't like reading about peak things, peak earnings, peak economy. when it hits a peak, is it a plateau or is there another side >> it doesn't have to be the peak but that's what people are nervous about. >> so...

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. eastern. i like glenn fogel >>> stocks sold off yesterday after jay powell indicated thatthefedcouldhike rates more than three times this year just to try to keep the economy from overheating. joining us now is andandreas gai and paul hickey. what do you think happened yesterday, andreas was this signaling from the fed? rates on the ten-year moved up that dragged down stock prices did he say anything that surprised you? >> he used some language that wasn't used before around potentially overheating economy. i don't think this changes the trajectory today i think he'll try to take back some comments to not scare people ultimately the 2% target is not a ceiling. if anything, they're still trying to get to 2%. so three or four, i don't think the comments he made change that >> paul, how about you >> the key word is could if data pick the up, inflation picks up, they may have to do four rate hikes. there's a lot of time between now and the end of the year. a lot of strong data came in at the end of last year data coming in weaker than expectations over the last few weeks. you're s

. eastern. i like glenn fogel >>> stocks sold off yesterday after jay powell indicated that the fed could hike rates more than three times this year just to try to keep the economy from overheating. joining us now is andandreas gai and paul hickey. what do you think happened yesterday, andreas was this signaling from the fed? rates on the ten-year moved up that dragged down stock prices did he say anything that surprised you? >> he used some language that wasn't used before...

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? >> i think it's a lot to do aboutthefed. thisis a normal year. this is the way the storm normally behaves if you had gone away on new year's eve and come back, you would say up 2%, right in line with our 10% expectation for the year this is what the stock market looks like the fear is because we're in ce fed will go too far. we're watching productivity closely. that's the key to containing inflation. >> how would we have better-than-expected productivity is that on the shoulders of corporations to make long-term investments? >> yes there's four factors that kept productivity town. there's some chance those will start to turn from headwinds to tailwinds. the first is capital deepening we already saw a tick up in capital spending it's reasonable to expect more of that with the new tax law the others are demographics, which had been a headwind, which might turn into a tailwind over the next couple of years >> you said 10%. that's what you're looking for by the end of the year the zn s s&p 500 is where >> line with organic growth. >> multiple stays where it is. >> multiple probably st

? >> i think it's a lot to do about the fed. this is a normal year. this is the way the storm normally behaves if you had gone away on new year's eve and come back, you would say up 2%, right in line with our 10% expectation for the year this is what the stock market looks like the fear is because we're in ce fed will go too far. we're watching productivity closely. that's the key to containing inflation. >> how would we have better-than-expected productivity is that on the...

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2018 that's priced to perfection. that they'll take their time that's only one person onthefed-->> but the other issue is the fact that we have inflation that is ticking up, whether you see it in raw materials, wages >> he also said the bond market has been doing their work for them we have seen yields push up. >> true. we've gone from 2.40 to 3% do we go from 3% to 3.5% it's how we move we jump from 2.40 to 3%. if we go from 3% to 3.5% but on a steady climb, the market would be accepting of that because you have much better growth because of the inflation. i i had think if you jump up fr% to 3.20, then the market gets shaky here in addition, the pullback was healthy given the amount of money that came into the overall market and in the month of january, just the pure speshg lags th speculation that you needed to have some of that come out >> let's focus on small and mid caps people have said those stocks will outperform the big caps you agree with that? >> at the start of the year i did not. in the pull back i got more optimistic we did have valuations come down the trend an

2018 that's priced to perfection. that they'll take their time that's only one person on the fed -- >> but the other issue is the fact that we have inflation that is ticking up, whether you see it in raw materials, wages >> he also said the bond market has been doing their work for them we have seen yields push up. >> true. we've gone from 2.40 to 3% do we go from 3% to 3.5% it's how we move we jump from 2.40 to 3%. if we go from 3% to 3.5% but on a steady climb, the market...

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to a more normal market. >> the other call that was interesting isthefedwon'ttouch the lever at all next year >> zero rate increases >> the neutral rate for fed funds, most people now think it's only 1% above inflation that's 3%, not 4%, which is what we might have thought 25 years ago. big deal so theylig slightly short of that people are calling for emerging markets to have resurgence if the fed is backing off the caveat to that, we're not the only central bank in the world. the ecb will cap purchases so it's not so clear there will be a backing off of tightening from other central banks, but still emerging markets and opportunity and maybe small caps in the u.s >> what does that mean for the dollar if we are are ahead of the curve, the dollar's run of strength may be waning we've seen that the last couple of weeks >> which would mean what in terms of investments >> it does mean there's perhaps more opportunities internationally than there were in the past. we know the valuation is incredibly compelling both in developed andmerging markets. the geopolitical headwinds have been

to a more normal market. >> the other call that was interesting is the fed won't touch the lever at all next year >> zero rate increases >> the neutral rate for fed funds, most people now think it's only 1% above inflation that's 3%, not 4%, which is what we might have thought 25 years ago. big deal so theylig slightly short of that people are calling for emerging markets to have resurgence if the fed is backing off the caveat to that, we're not the only central bank in the...

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the break. after the jobs number, we'll get reaction fromchicagofedpresidentcharlie evans. first on cnbc. we'll be right back. most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. we use so, why do we pay toters have a phone connected,. when we're already paying for internet. shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get up to 5 lines of talk and text included at no extra cost. so, all you pay for is data. choose by the gig or unlimited plus for a limited time get a $250 prepaid card when you buy any new samsung. xfinity mobile. it's a new kind of network designed to save you money. click, call, or visit an xfinity store today. >>

the break. after the jobs number, we'll get reaction from chicago fed president charlie evans. first on cnbc. we'll be right back. most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and...

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assimilate you're back home now back home. embrace it >> in the saddle >> jay powell's testimonyasfedchair.what it could mean for equity and bonds. i hope you're not using the excuse that you didn't buy into the correction did you in gonow that you got your correction? are you on the train you know what's awesome? gig-speed internet. you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. >>> welcome back jay powell set to testify before congress later this morning. joining us to talk markets is kamar and brett. we'll have a bit of dueling economists here. over the years people who have watched you have seen how you never really thought rates would head higher in a big way i'm not shire whether we can say you were wrong >> i don't think you can say i was wrong at all >> you though

assimilate you're back home now back home. embrace it >> in the saddle >> jay powell's testimony as fed chair. what it could mean for equity and bonds. i hope you're not using the excuse that you didn't buy into the correction did you in gonow that you got your correction? are you on the train you know what's awesome? gig-speed internet. you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys,...

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issues that we had years ago. a lot of people are pointing to this asthefedraisesshort-term rates >> is it a temporary thing >> should be a somewhat temporary thing. the "wall street journal" has a take on it just the money market stuff. part of it is repatriation cash is coming out of very short money market type instruments and into treasuries. the u.s. treasuries issuing a lot of treasury bills. all of these technical mechanical factors were weighing on the banks facebook and big tech seems like a place where you could hide >> jeff was like -- >> he was saying there's nothing to worry about >> facebook, social media. that's probably going to be contained. >> except those were some of the leaders on the market. but then tariffs, trade, powell, interest rates, sentiment. that's why i had my paper open, i was listening to what you were saying i was going to reference the lead editorial in the "wall street journal" explains the trade issue. you look at china, facebook is not allowed to operate in china. tesla gets a 25% tariff on cars they try to send over there, versus 2.5 here. p

issues that we had years ago. a lot of people are pointing to this as the fed raises short-term rates >> is it a temporary thing >> should be a somewhat temporary thing. the "wall street journal" has a take on it just the money market stuff. part of it is repatriation cash is coming out of very short money market type instruments and into treasuries. the u.s. treasuries issuing a lot of treasury bills. all of these technical mechanical factors were weighing on the banks...

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question on the table for us is doesthefedtakethat away so what the tax plan might give us and i think the fed will look at that. i think it's a mixed picture but a good opportunity to rebalance, do your blocking and tackling. do your homework and look at a global valuation story which might be a little bit more attractive than the u.s. valuation story. >> scott, why don't you weigh in on the fed we have kevin has set on later this morning he's made some comments that he doesn't think the fed necessarily will have to raise rates more rapidly than the market is already expecting, two to three times for the coming year what are your expectations in terms of growth expectations what do you think the if he had will do? >> this is a smoothe transition at the helm. fed. a lot more clouded outlook as you look at the last season, they have rotated off the committee. we're looking at a little bit more hawkish fed in 2018 and really a lot more uncertainty, i think, in fed policy just as the risks of a monetary policy error are starting to increase in terms of gdp growth, you know, you look

question on the table for us is does the fed take that away so what the tax plan might give us and i think the fed will look at that. i think it's a mixed picture but a good opportunity to rebalance, do your blocking and tackling. do your homework and look at a global valuation story which might be a little bit more attractive than the u.s. valuation story. >> scott, why don't you weigh in on the fed we have kevin has set on later this morning he's made some comments that he doesn't...

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, we're going to talk a lot aboutthefedandthefeddecisioni want to show you what's going on in the markets right now. as we get set for the market day, after this big fed decision, u.s. equity futures look like they would open lower, off, we'll call it about 50, 51 points s&p would open down about 8 points and the nasdaq would open down about 13 points let's show you treasury yields as well, after extending, well, the markets extending those losses from yesterday. a bit disappointed 2 pn 2.767. we want to show you what's happened overnight in asia tlooe at least on this side of the atlantic been sleeping, the nikkei down 3% hang seng, not nearly take the same kind of hit european equities, also showing red arrows across the board. the biggest hit to the cac, and the italian ftse is down a little bit it's not a great situation >> not right now it's not terrible. especially after yesterday's market action. >> still early >> what? >> it's still early. >> i know. a lot can happen. >> it can get terrible we have time >> we were off, what, more than 300 points at one point in the day

, we're going to talk a lot about the fed and the fed decision i want to show you what's going on in the markets right now. as we get set for the market day, after this big fed decision, u.s. equity futures look like they would open lower, off, we'll call it about 50, 51 points s&p would open down about 8 points and the nasdaq would open down about 13 points let's show you treasury yields as well, after extending, well, the markets extending those losses from yesterday. a bit disappointed 2...

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backed off a bit, too. we will see the last meetingoffedchairjanet yellen today at the fomc >> nice stories about janet yellen today >> the finale here as jay powell gets ready to begin february 1st. some big stories we're watching this morning jpmorgan saying that jamie dimon will stay in his role for about five more years. that time frame could suggest he's not planning on running for political office which has been speculated about for some time we talked to him about that last week in davos on this show the bank is promoting daniel pinto and gordon smith to co-presidents and coos pinto oversees corporate investment banking smith runs consumer and community banking. their names have been floated before as possible successors to dimon. quick note, i would contend to you this doesn't suggest he's either running for the president or that these are his successors this is the if you get hit by a bus plan, more than a signal to the markets that these are necessarily the two in line. >> i would agree >> they are the two in line today. they may not be the two in line five years f

backed off a bit, too. we will see the last meeting of fed chair janet yellen today at the fomc >> nice stories about janet yellen today >> the finale here as jay powell gets ready to begin february 1st. some big stories we're watching this morning jpmorgan saying that jamie dimon will stay in his role for about five more years. that time frame could suggest he's not planning on running for political office which has been speculated about for some time we talked to him about that...

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highs. that's the more interesting question we'll look at whatthefedsaystoday. it won't be interesting. we know they'll take a slightly hawkish tone what about what happens in march when chairman powell's first meeting takes place and they should hike a quarter point what will they say with that? what will we see with first quarter earnings after digesting the impact of the tax cuts that's when things get interesting. at that point we can look and say hey, we have another year of double digit earnings growth ahead of us. stocks are no longer expensive we're okay for a while it will be a churn through there. >> if you were to look at the positive things in the market, you look at corporate earnings, you look at consumer, business confidence, you look at gdp doing better than the last few years, you look at all these things, it's easy to be bullish. when you get a selloff of 10%, 12%, you wonder whether you're missing something. can i count on my analysis of the fundamental backdrop can i count on that being accurate that nothing is wrong what worries me is we assume that the

highs. that's the more interesting question we'll look at what the fed says today. it won't be interesting. we know they'll take a slightly hawkish tone what about what happens in march when chairman powell's first meeting takes place and they should hike a quarter point what will they say with that? what will we see with first quarter earnings after digesting the impact of the tax cuts that's when things get interesting. at that point we can look and say hey, we have another year of double...

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have the bank of england meeting, a triooffedofficialsare speaking todayphiladelphiafedpresidentpatrick harker, minneapolis fed president neel kashkari and esther george. we heard from robert kaplan this morning speaking in frankfurt he said the central bank should continue removing accommodation but added that the fed should be highly vigilant about market volatility and whether it has effect on the real economy as for earnings, cvs health, twitter, viacom, kellogg and yum brands reporting before the open bell. aig, expedia, news corp. are out after the close. dow looks like it would open down about 147 points off. the nasdaq off by 23 points. s&p 500 if it opened now would be off by 15.5 points. >>> senate leaders reached a long-term spending deal with hours to go before another government shutdown. kayla tausche has the latest this morning >> reporter: the senate and house are expected to vote today on the budget deal that was reached last night it has bipartisan support. it lifts 2011 spending levels by 3$300 billion it raises the debt limit until march 2019 and in

have the bank of england meeting, a trio of fed officials are speaking today philadelphia fed president patrick harker, minneapolis fed president neel kashkari and esther george. we heard from robert kaplan this morning speaking in frankfurt he said the central bank should continue removing accommodation but added that the fed should be highly vigilant about market volatility and whether it has effect on the real economy as for earnings, cvs health, twitter, viacom, kellogg and yum brands...

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is going to be what's happening withthefed. wedo expect a dovish hike the market is limiting the fed to less than one hike. 50% chance of one hike expect a dovish meeting this week expect the fed to move from three hikes to two expect the dots to drift lower >> rich, your take is that -- it really scares me you say this is one of the hardest markets in your career to get a handle on and that goes back a ways. this is -- >> 32 years, joe. >> that's saying something there's been a lot of scary markets over the last 32 years what's different about this one that has you scared? >> i think it's a combination of the speed in which information travels and then how it's traded and i'm talking about both up and down when you have markets that are really cloudy like this, and you have news flow in the morning and then all of a sudden you have these enormous swings, it erodes confidence in both the public markets and it also makes people skiddish. our concern is that could lead to some self-fulfilling prove if he is sis. i think we have to let some of these data points get through so it bec

is going to be what's happening with the fed. we do expect a dovish hike the market is limiting the fed to less than one hike. 50% chance of one hike expect a dovish meeting this week expect the fed to move from three hikes to two expect the dots to drift lower >> rich, your take is that -- it really scares me you say this is one of the hardest markets in your career to get a handle on and that goes back a ways. this is -- >> 32 years, joe. >> that's saying something there's...

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is there anything fundamentally wrong? >> isthefedintroducingrisk -- someone saying that the fed is finally introducing some volatility back into the market with the four raises we did this year >> qe was winding down i think the market was expecting two raises and now saying okay, the fed is right, three, maybe four we're going on this path and the market is waking up and saying, okay, we're on our way >> are we on our way to effectively measuring inflation? is it possible it'slooming in much worse state than it is? >> we don't think so we think the big offset is the secular and relentless move in the process of globalization-a gore ri algorithms, robotics on the factory floor and lower ends of technology whether mom and pop operations -- >> is this what caused the market selloff >> no it's not what caused the market sel market selloff but it means inflation is not a concern. >> of course, what i've been wrestling all week as the market was tumbling obviously, it starts as good news/bad news scenario the question is, could the bad news create a spiral of additional bad news?

is there anything fundamentally wrong? >> is the fed introducing risk -- someone saying that the fed is finally introducing some volatility back into the market with the four raises we did this year >> qe was winding down i think the market was expecting two raises and now saying okay, the fed is right, three, maybe four we're going on this path and the market is waking up and saying, okay, we're on our way >> are we on our way to effectively measuring inflation? is it...

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, at 3:30 the "wall street journal" headline hits, the story behind it, basically sayingthefedwillfurther consider -- >> stop the presses? >> it was that kind of a thing >> was a total stop the presses. i read it this morning yeah, in the last week it looked like -- ever since powell made that comment didn't the volume pick up on the rebound? >> volume picked up. it is good stuff >> nasdaq looked good. >> all day the big nasdaq stocks were outperforming all day housing stocks were outperforming. all day goldman sachs was outperforming. so even the most bombed out stuff was getting picked up. this is the third one of these sawtooth trips >> below 2,690 on the s&p. >> it's there. >> it's a tough thing to get through 28 >> it still might be but no day provides you an all-clear, but it was better than -- as you said, after tuesday, when people thought a lot of tuesday's decline was because we were closed wednesday, that was not the case >> i don't know whether the huawei story deserved -- so many dots to connect where that affects the u.s. economy all these guys are like things s

, at 3:30 the "wall street journal" headline hits, the story behind it, basically saying the fed will further consider -- >> stop the presses? >> it was that kind of a thing >> was a total stop the presses. i read it this morning yeah, in the last week it looked like -- ever since powell made that comment didn't the volume pick up on the rebound? >> volume picked up. it is good stuff >> nasdaq looked good. >> all day the big nasdaq stocks were...

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labor market. it's allowedthefedtomove slowly it's allowed the unemployment rate to get down to these levels they won't panic they'll keep adjusting rates higher, but they won't panic >> once again we talk about -- we have not talked rates with you guys, i think they're tethered to that german bund >> below 2.8 i grow 100%. >> did you see the note the other day about the german banks because of the italian banks it's happening again i don't want to call it insolvency supposedly in italy what they owe versus the percentage of gdp is worse than greece at the height of the crisis >> and much bigger numbers >> all the german banks are exposed to the italian yankbank. >> the eu pulled short of creating a european-wide or eurozone wide system of insuring each other's banks with the way they did qe so each country ended up owning its own. if that problem goes further, they'll have to really step in and finish the european bank guarantees >> you think >> yeah. what's strange about europe, even though we have these low interest rates in europe, the eurozone has been slowing down in part

labor market. it's allowed the fed to move slowly it's allowed the unemployment rate to get down to these levels they won't panic they'll keep adjusting rates higher, but they won't panic >> once again we talk about -- we have not talked rates with you guys, i think they're tethered to that german bund >> below 2.8 i grow 100%. >> did you see the note the other day about the german banks because of the italian banks it's happening again i don't want to call it insolvency...

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president trump's steel and aluminumariffs later,dallasfedpresidentrob kaplan will join us to talk interest rates, inflation and employment stay tuned, you're watching "squawk box" on cnbc >>> all right. welcome back time for the executive edge. we will start with the corporate response to president trump's steel and aluminum tariffs ray farreola made the case last night on "mad money" for broadening the case and not focusing on china specifically >> the reason you cannot only poke us on china is because of the spillover effect china sends product all over the world. they then send it into the united states or the chinese steel so overwhelms the steel industries of other countries that they're forced to send into the united states. >> we will talk more about the tariffs with james jones >> and martin shkreli has been ordered to forfeit 7$7.3 million including his ownership of that wu tang clan album that he bought for himself for $2 million. he'll have to give up $5 million held in a brokerage account. that was from his stake in drug compa company. he also has a painting by picasso

president trump's steel and aluminumariffs later, dallas fed president rob kaplan will join us to talk interest rates, inflation and employment stay tuned, you're watching "squawk box" on cnbc >>> all right. welcome back time for the executive edge. we will start with the corporate response to president trump's steel and aluminum tariffs ray farreola made the case last night on "mad money" for broadening the case and not focusing on china specifically >> the...

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united states. looks like the ten year right now 2.816% this is happening as we await to hearthefed'sdecisionon whether to raise interest rates and what they're looking at for the economy for next year. we're also keeping track of crude oil prices oil dropped 40% on oversupply concerns also potentially concerns about what the demand picture looks like opec cuts will won't kick in for a while. the u.s., russia and saudi arabia are pumping more. wti down a penny to $46.23 >> okay. major deal in the drug sector happening overnight. let's talk about pfizer and glaxosmithkline. they're consumer businesses and health care units. they're planning to eventually spin off that business they're going to come together the move will create a global giant for over-the-counter staples such as advil, tums and toothpaste with $13 billion in annual sales and also free up glaxo and pfizer to concentrate on prescription drugs which are more profitable. this is a fascinating turn of events we're going to hear much more about this deal coming up with the glaxo ceo emma walmsley. that is going to happen a

united states. looks like the ten year right now 2.816% this is happening as we await to hear the fed's decision on whether to raise interest rates and what they're looking at for the economy for next year. we're also keeping track of crude oil prices oil dropped 40% on oversupply concerns also potentially concerns about what the demand picture looks like opec cuts will won't kick in for a while. the u.s., russia and saudi arabia are pumping more. wti down a penny to $46.23 >> okay....

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treasury secretary andthefedchairmanhe told reporters that both of the men have his full support. >> do you have support in secretary mnuchin? >> yes, i do very talented, very smart person >> what about the fed chair. >> we'll see they're raising interest rates too fast that's my opinion. i certainly have confidence. >> president trump acknowledged the fed is raising rates because the economy is strong. he suggested that's a form of "safety. the president has been holed up inside the white house amid the government shutdown. he's frustrated he's not down in florida with his family. he's mad about the market selloff. he doesn't like the stale mmateo government spending. here's what the democrats put out heading into christmas they said president trump is plunging the country into chaos. the stock market is tanking, and the president is waging a personal war on the federal reserve. it went on to say the president wanted the shutdown but he seems not to know how to get himself out of it. trump may have opened the door to compromise by suggesting a border wall is the same thing as a

treasury secretary and the fed chairman he told reporters that both of the men have his full support. >> do you have support in secretary mnuchin? >> yes, i do very talented, very smart person >> what about the fed chair. >> we'll see they're raising interest rates too fast that's my opinion. i certainly have confidence. >> president trump acknowledged the fed is raising rates because the economy is strong. he suggested that's a form of "safety. the president...

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apredictablefed. onceyou had that initial scare about yields going higher, we had the little uptick in volatility, it disturbing the whole premise of a lot of investors in terms of getting us to those highs in january. we had our first trading session in more than 100 days where you had at least a 0.6% decline. what happens when you finally get things broken, streaks broken human traders and trading systems say, okay, i guess the game has changed a bit there will be an unwind. we had to adjust positioning, sentiment and arguably valuation for this new world looking at a two-year chart of the s&p 500, remember, we're coming up on the two-year anniversary of the jamie dimon low, after that nasty global correction two years, you see that's a nice trend line but look at that bulge that started late last year from about thanksgiving through the end of january you accelerated to the upside. that was the public participation, an overshoot. now you come down, you have more or less come down to where that two-year trend is. you were 18% up from august to january. what we've done is un

a predictable fed. once you had that initial scare about yields going higher, we had the little uptick in volatility, it disturbing the whole premise of a lot of investors in terms of getting us to those highs in january. we had our first trading session in more than 100 days where you had at least a 0.6% decline. what happens when you finally get things broken, streaks broken human traders and trading systems say, okay, i guess the game has changed a bit there will be an unwind. we had to...

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yesterday's big surge in the markets here's the commentfromfedchairjerome powell that sparked the rally. >> interest rates are still low by historical standards. and they remain just below the range of estimates of that level that would be neutral for the economy, that is neither speeding up or slowing down growth >> you know, watching it yesterday, i checked a lot, we were up about 80 or 90 the next time we were up, we were up 370. you can see it, the stocks surged after his comments. the dow on pace to break its two-week losing streak is it a powell put did powell look at the markets did powell listen to cramer? did powell listen to trump take your pick all of the above wti crude prices falling below 50 bucks a barrel for the first time since october of last year. jim cramer was up and tweeting at 4:18 today. i answered his tweet this morning. >> did you >> i did two days of data dependent fed, oil goes below 50. one and wait is the new neutral. i replied with amazing, with a small "a." cramer has a few followers or something, then my twitter feed exploded let's get to mike sant

yesterday's big surge in the markets here's the comment from fed chair jerome powell that sparked the rally. >> interest rates are still low by historical standards. and they remain just below the range of estimates of that level that would be neutral for the economy, that is neither speeding up or slowing down growth >> you know, watching it yesterday, i checked a lot, we were up about 80 or 90 the next time we were up, we were up 370. you can see it, the stocks surged after his...

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saw stocks end lower yesterday afterthefedannouncednot only that it was raising rates, but it may be raising rates at a faster pace than anticipated for next year, too. dow is down 16 points now. s&p down 1.38, the nasdaq down about 13 points. yesterday the yield on the ten-year creeped higher to 2.979% this morning you're looking at the ten-year yield at 2.95%. >>> weak economic data out of china overnight. the china central bank kept key rates unchanged today and this was a surprise as the pobc was widely expected to hike rates following the fed's move yesterday. this morning a decision is due from the ecb we'll get that at about 7:45 a.m. this morning. mario draghi will hold a news conference at 8:30 eastern, which we will monitor and bring to you also the top corporate story, comcast offering $65 billion in cash for some of 21st century fox's assets a $35 per share bid, 20% higher than disney's all stock bid. i think there's no other way to say it but game on and clearly comcast has now put disney in a box one way or the other. >> yeah. there's a lot of mice analogies. the

saw stocks end lower yesterday after the fed announced not only that it was raising rates, but it may be raising rates at a faster pace than anticipated for next year, too. dow is down 16 points now. s&p down 1.38, the nasdaq down about 13 points. yesterday the yield on the ten-year creeped higher to 2.979% this morning you're looking at the ten-year yield at 2.95%. >>> weak economic data out of china overnight. the china central bank kept key rates unchanged today and this was a...

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are few people who disagree with that you look at whatthefedisdoing, where we are with unemployment it's hard to see the cycle extending for several more years. >> are we cheaper? we're back at levels from october 9th. so we're back to the levels where we basically sold off for the month of october can we say we're cheaper or do we have the same valuations as back then and the same worries except that the midterms are over >> you're right. we're not cheap. we're slightly cheaper we pulled back 9% and rebounded after october ended. but i think for most investors the issue is simply where should we be positioned from here so you look at where the fundamentals are we still think being balanced across equities and fixed income and internationally, that's still the best play. >> how do you measure the length of a cycle if it was purely time, we're late cycle then i think if it was where you're at a point where the fed needs to really raise rates to contain a hot economy, rates seem so low to be late cycle then again, if you look at unemployment, that's late, late, late cycle

are few people who disagree with that you look at what the fed is doing, where we are with unemployment it's hard to see the cycle extending for several more years. >> are we cheaper? we're back at levels from october 9th. so we're back to the levels where we basically sold off for the month of october can we say we're cheaper or do we have the same valuations as back then and the same worries except that the midterms are over >> you're right. we're not cheap. we're slightly...

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probably slow the $64,000 question is canthefedengineera soft landing or not. historically they don't have a good track record. we get deeper into the tightening in the fourth quarter and certainly next year. >> if there's something that kills this -- >> it's always the fed always the case. then you will have the ecb ending qe at the end of the year and how do markets respond to that. >> mark, how do you work that into expectations for the economy? the fed is the wildcard. we will hear more from jerome powell today what are you listening for what do you think the possible snafr scenarios are? >> bostic has been clear saying we will not go out of our way to invert the yield curve kaplan and kashkari have been saying we are not going to go too fast i'm looking for anything that says that december is not a sure thing. right now we're counting on a rate hike on september and december we have two more rate hikes next year our forecast we have stronger gdp growth in 2019 than we do in 2018 that would say there's more of a risk that the fed may have to do more i really lock to see if t

probably slow the $64,000 question is can the fed engineer a soft landing or not. historically they don't have a good track record. we get deeper into the tightening in the fourth quarter and certainly next year. >> if there's something that kills this -- >> it's always the fed always the case. then you will have the ecb ending qe at the end of the year and how do markets respond to that. >> mark, how do you work that into expectations for the economy? the fed is the...

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now? 2.93 the highest level since 2014 the dow futures are in solid territory. chancesoffedratehike probabilities up pretty good this morning 93% chance for the first hike. 65% for the second hike. 57% chance for the third hike. you remember when stocks came off their highs last week, we were down in the 40s for that third hike all this happening with another inflation report on the way. the producer price index should show strong increases this morning and test the market's mettle once again. maybe as some argued yesterday, inflation may be on the ride but yesterday's report was exaggerated proof or maybe stocks have decided it's not that worried that better earnings from the tax cuts, higher growth will outweigh the down side of inflation or one more thing, maybe we have reached the singularity and it's the black boxes that are in charge and they just defy a human narrative, they're trading on algorithms that even the guys who programmed them can't figure out. >> number one, if you -- if you're jonesing for 2%, and it's like all you think about for five years -- >> 2% growth

now? 2.93 the highest level since 2014 the dow futures are in solid territory. chances of fed rate hike probabilities up pretty good this morning 93% chance for the first hike. 65% for the second hike. 57% chance for the third hike. you remember when stocks came off their highs last week, we were down in the 40s for that third hike all this happening with another inflation report on the way. the producer price index should show strong increases this morning and test the market's mettle once...

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stuff >> the short end is the function ofthefedyousee short rates go up. you seethefedraisingrates, they imply they will raise rates again next month the long end is that the story about -- continues to be the story about inflation. we've seen inflation rise over the last two years but not so much. if you look back to the core pc, which the fed looks at in 2016 we were 1.7, 1.8, 1.9 now. we're up from 1.6. at least from the last year inflation has gone up it has not gone up two years. the average hourly earnings, it's a wage thing. >> can i infer the following everybody grows very concerned about why long-term interest rates are not growing, your argument is don't worry about that because there's little inflation. >> the other factor is -- >> it's not a sign that the economy will fall off a cliff or we're heading towards inversion. >> that's why we're maintaining the 30 basis point spread betweentwos and tens as the dollar gets stronger, this gets better, you compare the u.s. ten-year against other sovereign debt you even factor in the currency hedge, it's still one of the be

stuff >> the short end is the function of the fed you see short rates go up. you see the fed raising rates, they imply they will raise rates again next month the long end is that the story about -- continues to be the story about inflation. we've seen inflation rise over the last two years but not so much. if you look back to the core pc, which the fed looks at in 2016 we were 1.7, 1.8, 1.9 now. we're up from 1.6. at least from the last year inflation has gone up it has not gone up two...

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thefedorchestratedthis build up in credit and just trying to -- when you go the other way, this is what you get when you try to go the other way do you have to look beyond that to understand why the markets are in flux? >> that's the primary factor here the fed and banks around the globe are trying to get out of the business of suppressing volatility that's not easy to do. i'm reminded of the godfather part 3 where al pacino said just when i thought i was out, they're pulling me back in the markets will not take it easily for the fed to stop suppressing volatility >> terranova, he's not saying anything relax. good that is used a lot. >> the godfather >> no, you pull me back in for an awful movie, that definitely is -- compared to -- >> an awful movie? >> compared to g1 and g2 >> on a relative basis bill, we hit the high for the ten yoo year, 3.26, where do we go in 2019 >> the first move, higher in volatility this quarter was driven by the treasury market. since the fed meeting on november 8th treasuries have settled back into the background i think if the equity markets can find t

the fed orchestrated this build up in credit and just trying to -- when you go the other way, this is what you get when you try to go the other way do you have to look beyond that to understand why the markets are in flux? >> that's the primary factor here the fed and banks around the globe are trying to get out of the business of suppressing volatility that's not easy to do. i'm reminded of the godfather part 3 where al pacino said just when i thought i was out, they're pulling me back...

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fedmeetingindicating the bank was leaning towards more rate hikes. traders took notice of cnbc's interview with wilbur ross who said u.s./china trade talks are on hiatus for now but not at an impasse. the futures are barely budging one direction or the other traders are still trying to figure out what they think about these things >>> if you check things out, the dow futures are indicated down by 2 1/2 points. s&p down by 1. nasdaq is up by less than a point. that's similar to what we saw yesterday there the s&p 500 and d nasdaq if you're looking at what we've been doing lately, neither the s&p 500 nor the nasdaq have posted back-to-back gains in october. the dow hasn't done so since rising on the first three days of the month s&p is down 8 over the last 10 trading sessions despite that we could look at our biggest weekly gain in four months for the s&p because of the big gains we saw on tuesday. we'll check this out let's look at what's happening in the treasury markets. you'll see the ten-year note right now is yielding 3.216% european equities right now are hanging in there ta

fed meeting indicating the bank was leaning towards more rate hikes. traders took notice of cnbc's interview with wilbur ross who said u.s./china trade talks are on hiatus for now but not at an impasse. the futures are barely budging one direction or the other traders are still trying to figure out what they think about these things >>> if you check things out, the dow futures are indicated down by 2 1/2 points. s&p down by 1. nasdaq is up by less than a point. that's similar to...

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thefedtoit deserves to be here because we have a great economy, then we'll switch -- as a real estate guy, we will switch back to lower rates. when we talk about the economy, i figured he doesn't like higher rates. has anyone asked him to -- obviously no one asked him outright whether you think they should be raising rates. >> not since he became president. >> if you listen to what he says, he says i know people say i shouldn't be saying this but i will tell you what as a private citizen, this is what i would have said. i'll tell you the same thing now, i don't care. let's get to the big interview with president trump talked about everything from russia and the trade war with china to the aforementioned fed's interest rate policy >> mr. president, thank you for having us. >> thank you, joe. >> we're sitting in a pretty storied place. >> very storied. >> it's something to be right outside the oval office. last time we met was in davos. >> yes that's right >> we talked about a lot of different things one of the things that i asked you towards the end of the interview was as a bus

the fed to it deserves to be here because we have a great economy, then we'll switch -- as a real estate guy, we will switch back to lower rates. when we talk about the economy, i figured he doesn't like higher rates. has anyone asked him to -- obviously no one asked him outright whether you think they should be raising rates. >> not since he became president. >> if you listen to what he says, he says i know people say i shouldn't be saying this but i will tell you what as a...

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replacin its ceo. we'll talk about the company's future plus the president's comments onthefed. markgrant is going to join us to talk about that "squawk" returns in just a moment running a small business is demanding. and that's why small business owners need more. like internet that's up to the challenge. the gig-speed network from comcast business gives you more. with speeds up to 20 times faster than the average. that means powering more devices, more video conferencing, and more downloads in seconds, not minutes. get fast internet and add phone and tv for only $34.90 more per month. comcast is building america's largest gig-speed network to give small businesses more. call 1-800-501-6000 today. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. >>> behind the wheel fiat chrysler replacing sergio marjion amid health issues >>> president trump tweeting saying don't threaten the united states again or else

replacin its ceo. we'll talk about the company's future plus the president's comments on the fed. mark grant is going to join us to talk about that "squawk" returns in just a moment running a small business is demanding. and that's why small business owners need more. like internet that's up to the challenge. the gig-speed network from comcast business gives you more. with speeds up to 20 times faster than the average. that means powering more devices, more video conferencing, and...

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16. the nasdaq down by 68. again, this is all on concerns thatthefedsoundedmore hawkish yesterday. i'm not sure why that came as a surprise to the street looking at the economic forecast, it looks like they'll raise rates at least one more time in 2019 two times in 2019? >> two more in 2019. maybe a third. >> not for 2018. i don't understand wall street's reaction when we had so many economists saying we're looking for four hikes this year >> we are where we were. there is not great resolution. three leaning towards four and more hawkish down the road >> that doesn't surprise me at all. >> this is a market that's difficult to please and easy to rattle in this range the trade stuff, i think it could have been logical for the market to hold that rally yesterday on jay powell. >> nothing came as a surprise to me from anything he said >> the fed's growth outlook is -- >> strong. 2.7% >> but pointed out back when things were bad, i can remember now, they remained me, for four, five years every year the growth outlook was too high >> started at 3, didn't get there. >> then the

16. the nasdaq down by 68. again, this is all on concerns that the fed sounded more hawkish yesterday. i'm not sure why that came as a surprise to the street looking at the economic forecast, it looks like they'll raise rates at least one more time in 2019 two times in 2019? >> two more in 2019. maybe a third. >> not for 2018. i don't understand wall street's reaction when we had so many economists saying we're looking for four hikes this year >> we are where we were. there...

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encouragesthefedtoget back on the philip's curve mantra >> if you're looking for 7% in a day, you're talking about more than 1500 points >> that's right. but we're at 27,000 now. or were. >> i'm just saying for people to get their heads around it. >> we haven't recalibrated 800 points sounz like what we used to think of 800 points. its no the anymore >> we were up to 1300 points >> we have to recalibrate. >> the hedge fund managers from the $100 million to the $100 million plus, this he see the pullback as frustrating and annoyance but not anywhere near a capitulation nothing even close >> we want capitulation though >> this is an opportunity. but for -- you know, the hedge fund guys typically have a mandate to be fully invested doesn't mean they have to be 100% net long. they have to be fully invested they have to have the investments in place so they have a mandate from the retail investor. necessity have to be in there. but that doesn't mean for me, you know, on a personal basis, 3%, i wouldn't even think of putting cash to work that's not enough. 10%? i'm interested >> in our min

encourages the fed to get back on the philip's curve mantra >> if you're looking for 7% in a day, you're talking about more than 1500 points >> that's right. but we're at 27,000 now. or were. >> i'm just saying for people to get their heads around it. >> we haven't recalibrated 800 points sounz like what we used to think of 800 points. its no the anymore >> we were up to 1300 points >> we have to recalibrate. >> the hedge fund managers from the $100...

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2016. it's very hard forthefedtopull off a soft landing. 80% of the rate hike cycle has led to a recession every time they begin a rate hike cycle, the bond market knows let's flatten the curve. it started to flatten late 2016 as the fed was picking up their pace of the rate hikes from one per year to three per year, this year they'll do it four times. to your question, it's a combination of the big drop in oil, reducing inflation expectations, the pce core number last week that moderated was slightly below expectations. but there's a legitimate concern about slowing growth overseas. the impact on housing, autos do to the rising rates here i think it's a combination of those things it wasn't just that stock market that really surprised us, it was a dramatic flattening of the curve in two days it was like a reverse parabolic move >> hit us over the head first thing in the morning we were wondering whether we would get a two handle >> the move in the fives changed everything >> the two-year, the day before powell soundeddovish was trading 2.82 >> but the fives moved >> the fives

2016. it's very hard for the fed to pull off a soft landing. 80% of the rate hike cycle has led to a recession every time they begin a rate hike cycle, the bond market knows let's flatten the curve. it started to flatten late 2016 as the fed was picking up their pace of the rate hikes from one per year to three per year, this year they'll do it four times. to your question, it's a combination of the big drop in oil, reducing inflation expectations, the pce core number last week that moderated...

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thefed. >>becauseofthefed. we'regoing to talk more about that in a moment let's look at what happened overnight in asia. you'll see the nikkei also closed down. it was down by about 1.8% and stocks in shanghai down by 8/10 of a percent and if you take a look at what's happening in europe with early trading things are looking mixed there the ftse is down by 4/10 of a percent. stocks are up in italy, down in spain. finally, take a look at treasury yields, too. treasury yields right now for the ten-year, 2.82%. that yield has come under more pressure adds we continue to kind of guess what the fed is going to do. trying to see what's happening with the economy also look at oil prices, they were down sharply on a report of higher u.s. inventories, higher than expects inventories and faster production at u.s. shale basins wti down by 2.75% all the way to 48.51. >> we have some other corporate news for you the big one, cbs officially announcing that former ceoless moonves not entitled to that $120 million severance package he was ousted from the media giant in september following al

the fed. >> because of the fed. we're going to talk more about that in a moment let's look at what happened overnight in asia. you'll see the nikkei also closed down. it was down by about 1.8% and stocks in shanghai down by 8/10 of a percent and if you take a look at what's happening in europe with early trading things are looking mixed there the ftse is down by 4/10 of a percent. stocks are up in italy, down in spain. finally, take a look at treasury yields, too. treasury yields right...

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tight for several years likethefedissuggesting and not ignite a tremendous amount of input led price pressures. so we do think -- i agree with mark that the economy is doing well, but the risk is low. >> say there is no inflation. >> no, not for us. we're favorable on the equity market particularly in the u.s our view is the markets are re-evaluating where the neutral is we think powell's comments about how prolonged this could be were the initial spark. we wouldn't say there was an answer if it's based on, yes, there is productivity gains, long run is better that's not necessarily a negative story for equities. we would agree with that view. >> can we still import disinflation i have the feeling that we have a domestic economy that's doing things on its own. >> right. >> can we still import disinflation from around the world? >> yeah, some. >> really? >> not a lot that's a good thing to do but it's good that we don't slow down necessarily with the rest of the world. >> right the import content is relatively low for domestic inflation we are importing some. >> michelle, you mig

tight for several years like the fed is suggesting and not ignite a tremendous amount of input led price pressures. so we do think -- i agree with mark that the economy is doing well, but the risk is low. >> say there is no inflation. >> no, not for us. we're favorable on the equity market particularly in the u.s our view is the markets are re-evaluating where the neutral is we think powell's comments about how prolonged this could be were the initial spark. we wouldn't say there...

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the market has done is sold off 10% and you can't deny thatthefedislooking at this and really i think what he invoked on wednesday is what you said, a powell put >> doug, you had similar comments you say he used the dark room analogy a few times, you start bumping into furniture we heard that one time and didn't pay much attention. you don't know where you're headed until you feel your way around does that indicate to you we have no idea about next year? one, two, three, zero? what do we know? >> in my outlook i call it the storm before the calm. think about what the fed has achieved he had seven rate increases. we're at 2.25% fed funds rate. think about that when the president got elected two years ago. we were at zero rate we had the first rate increase historically speaking everybody was afraid of how we would unwind this unconventional policy he's achieved it that's somewhat miraculous i think the market is missing that he's taken a lot of excesses out, bitcoin dropping, oil prices dropping, the tech wreck. but he is setting the stage for the calm that i'm seeing out in the

the market has done is sold off 10% and you can't deny that the fed is looking at this and really i think what he invoked on wednesday is what you said, a powell put >> doug, you had similar comments you say he used the dark room analogy a few times, you start bumping into furniture we heard that one time and didn't pay much attention. you don't know where you're headed until you feel your way around does that indicate to you we have no idea about next year? one, two, three, zero? what...

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. >> that makes no sense either. >> asthefedraisesrates it gives another alternative. you called it t.i.a.r.a. there is a real alternative? >> yeah. >> we'll find out from loretta mester -- >> did she promise to tell us? >> she's a voting member of the fomc, what she says matters. so we'll hear from her and get part of the debate that will happen in that room. >>> amazon out with mixed third quarter results. they posted better-than-expected earnings but revenue missed the street's estimates joining us is eric sheridan. i keep saying mixed quarter. this was a spectacular quarter when you look just at the bottom line it's the concern about the fourth quarter that is dragging things >> this is a debate about revenue growth revenue growth is decelerating at amazon. the rate to which is decelerates is the question. we've seen this happen before in tech when you go from hype every growth to more modest growth, profits kick in, there's a transition that happens as you move from trading on revenue multiples to ebita and ebit multiples. so you're seeing profit beats, slowdown in revenue, but

. >> that makes no sense either. >> as the fed raises rates it gives another alternative. you called it t.i.a.r.a. there is a real alternative? >> yeah. >> we'll find out from loretta mester -- >> did she promise to tell us? >> she's a voting member of the fomc, what she says matters. so we'll hear from her and get part of the debate that will happen in that room. >>> amazon out with mixed third quarter results. they posted better-than-expected...

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either >> cramer, when he followsthefed, youremember the first time with the giraffe dress that that person was -- >> they know nothing >> yeah. they know nothing. he got -- he's been a little on it, ppg he read a lot more into ppg than people thought. the best point is fed guys, it's a rookie mistake to not just always say data dependent. we're data dependent what are you going to do we're data dependant, to not say that and say we're a long way -- long way from neutral. >> we'll go right through neutral. >> why would you not say we raised just now. we'll be data dependent, you made the point in makeup, couple of guys getting makeup together, you said those charts are insane >> the dot plots >> looking out to 2019 for dot is worthless information >> we are getting to the point -- i understand what jerome powell is doing he's trying to break away from the concepts of the dot plot that the fed used for the last ten years. >> you don't think he's saying i'm learning on the job? >> he think he's been trying to get the markets away from being spoon fed and told exactly where markets

either >> cramer, when he follows the fed, you remember the first time with the giraffe dress that that person was -- >> they know nothing >> yeah. they know nothing. he got -- he's been a little on it, ppg he read a lot more into ppg than people thought. the best point is fed guys, it's a rookie mistake to not just always say data dependent. we're data dependent what are you going to do we're data dependant, to not say that and say we're a long way -- long way from neutral....

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has everybody and we'ring if you're going to seethefedmovingmore quickly. and the two-year, 2.8% and take a look at currency markets you'll see at least at this point it looks like the dollar is up against the euro, 1.2455 and down again the yen 1.0986. >>> let's get up to speed, sri joins us in london but we'll start with nancy live in singapore nancy. >> hi there, well that selloff on friday on wall street spilling over into the asian session. as you can see a screen of red behind me. let's start with the underperformer that's the nikkei 225. almost in lockstep with the dow's move on friday a percentage loss of 2.55% here. yes, the dollar has been giving back against the recent gains against the yen. that tends to weigh against export exporters. that is broad-based against the shanghai deposit there was conservative data on the services sector coming out of china elsewhere, traders did speculate that there could be buying from state-backed funds into the big heavyweights in shanghai let me show you some of the heavyweights on the move to the upside as you can see the big banki

has everybody and we'ring if you're going to see the fed moving more quickly. and the two-year, 2.8% and take a look at currency markets you'll see at least at this point it looks like the dollar is up against the euro, 1.2455 and down again the yen 1.0986. >>> let's get up to speed, sri joins us in london but we'll start with nancy live in singapore nancy. >> hi there, well that selloff on friday on wall street spilling over into the asian session. as you can see a screen of...

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, too so many people talking about whatthefedwilldo next. will they raise in december. the ten-year note, 3.077%. the atlanta fed lowered its projections for the fourth quarter to 2.5%. we have mark grant to talk about that look at oil prices lots of damage there crude oil down 6.6% yesterday. 53.43 is where it closed that's the lowest settlement since october of 2017. this morning crude oil up by 86 cents for wti to 55.29 >>> let's check out a some of the top corporate stories. walgreens and humana are in talks. the two companies are considering taking equity stakes in each other. this would be the latest drugstore operator to team up with a health insurer. cvs last year announced a $69 billion deal with aetna. there's been speculation about a humana/walgreens deal for some time >> mark zuckerberg defending facebook this morning ahead a number of scandals and media report zuckerberg dismissing reports about leadership changes >> so you are not stepping down as chairman. >> that's not the plan >> that's not the plan would anything change that >> i mean, eventually over time, i'

, too so many people talking about what the fed will do next. will they raise in december. the ten-year note, 3.077%. the atlanta fed lowered its projections for the fourth quarter to 2.5%. we have mark grant to talk about that look at oil prices lots of damage there crude oil down 6.6% yesterday. 53.43 is where it closed that's the lowest settlement since october of 2017. this morning crude oil up by 86 cents for wti to 55.29 >>> let's check out a some of the top corporate stories....

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stock market, for the underlying economy. i would say whenthefedisat zero and asset prices are rising, but we saw the income inequality got worse, but it's different at this point. it's a proxy for gdp, for jobs getting -- for the job market getting good enough to where people can start getting jobs they want. not part-time jobs start getting raises >> i hope you're right, but i don't think we're there yet. >> i know you don't, but you didn't think mcdonald's ce work osh ceo would be doing anything. >> the rally -- >> every 1,000 points was the last 1,000 as it happened i hope you weren't responsible for anyone who bailed out early. i wouldn't want to have that on my -- >> i'm saying you're now saying this is bleeding over into the real economy the question is how much does it bleed into the real economy? >> not bleed in. this is a reflection of what's happening in the real economy. >> that's the question >> my point was, i went back to the '80s if you're young, you sort of have been conditioned to believe the past eight years is normal that 2% is good. these are the best -- >>

stock market, for the underlying economy. i would say when the fed is at zero and asset prices are rising, but we saw the income inequality got worse, but it's different at this point. it's a proxy for gdp, for jobs getting -- for the job market getting good enough to where people can start getting jobs they want. not part-time jobs start getting raises >> i hope you're right, but i don't think we're there yet. >> i know you don't, but you didn't think mcdonald's ce work osh ceo...